Lasting Powers of Attorney (LPAs) have been hitting the headlines over recent weeks but for all the wrong reasons. Former Court of Protection Judge, Denzil Lush, has criticised the transparency of the Lasting Powers of Attorney (LPA) process and has warned that the public needs to be alerted to risks arising from a lack of safeguards in the power of attorney system. But are these criticisms fair and what can be done to reduce the risk of abuse?
What is a Lasting Power of Attorney (LPA)?
There are two different types of Lasting Powers of Attorney. One relates to 'Property and Financial Affairs' and the other relates to 'Health and Welfare'. Both Lasting Powers of Attorney appoint trusted people (attorneys) to act on a person's behalf should they lose the mental capacity to make decisions for themselves regarding financial matters or general welfare.
A Property and Financial Lasting Powers of Attorney appoints attorneys to make a range of decisions about finances, including the buying and selling of property, operating a bank account, dealing with tax affairs and claiming benefits.
A Health and Welfare Lasting Powers of Attorney appoints attorneys to make decisions regarding where you should live, day-to-day care, and whether to consent or refuse consent to medical treatment on a person's behalf.
There are currently 2.5 million registered Lasting Powers of Attorney, and in 2016 alone, almost 650,000 applications were made to the Office of the Public Guardian to register Lasting Powers of Attorney.
Why has the controversy arisen?
Mr Lush's criticisms stem from his concerns that giving someone the power to make decisions on another's behalf is leaving elderly people open to abuse. In the foreword to his new book, Mr Lush said lack of transparency causes suspicions and concerns that 'rise in a crescendo and eventually explode'. The former judge went on to criticise the Ministry of Justice as being "disingenuous" in its promotion of the legal document. The legal document's popularity has been the result, he says, of a "vigorous campaign" by the Ministry of Justice and its agency the Office of the Public Guardian, which administers the system. Mr Lush said that he personally would prefer the (albeit more time consuming and costly) alternative of a Deputyship.
The recent BBC article on the topic, reported the story of Frank Willett, a retired veteran, who made an Lasting Powers of Attorney appointing his neighbour Colin Blake to act as his attorney. Blake went on to withdraw nearly £9,000 from Mr Willett's account in a single transaction. As he had power of attorney, the bank didn't contact Mr Willett's relatives. Blake continued to draw out more money, using the sums to pay his own bills. In early 2008, almost 5 years after the Lasting Powers of Attorney was first put in place, after becoming aware of the financial abuse, Mr Willett's daughter managed to successfully revoke the Lasting Powers of Attorney but only to discover that all of her father's money had gone - along with his medals from 35 years service in the Army.
Are Mr Lush's criticisms fair?
Mr Lush's comments have given rise to fears that Lasting Powers of Attorneys are a direct avenue for financial abuse. Whilst it would be disingenuous to claim that abuse of the Lasting Powers of Attorney process is not a possibility, it remains important to put Mr Lush's comments into context. His 20-year career at the Court of Protection will have presented him with the very worst cases of financial abuse. Whilst there is no official data on abuse cases, it is thought that they are relatively rare in comparison with the large number of people who benefit from these documents. An Lasting Powers of Attorney can be a positive and effective low-cost legal tool, which ensures a person's wishes are respected should they ever lose capacity. In the rare cases of abuse of the Lasting Powers of Attorney process, criticisms should be quantified with the guidance that there is a clear need for professional advice when considering powerful legal documents of this nature.
Joe Egan, president of the Law Society, has supported the need for professional advice saying that, 'because of the significant influence a power of attorney places over your affairs, it is important to get legal advice from a solicitor on whether it is right for your circumstances'.
He added: 'While the risk of exploitation in these difficult circumstances can never be entirely eliminated, a solicitor can help prevent abuse, reduce the risk of trouble, and ensure those who need them can get these important documents in place to ensure someone is there to look after their affairs when they are no longer able to look after themselves.'
There also remain certain safeguards in place in the Lasting Powers of Attorney process itself which help to mitigate the risk of abuse. The application process requires that an independent third party provides a certificate confirming that the individual making the Lasting Powers of Attorney is fully aware of the effect of the document, and that they are not being inappropriately pressured to prepare it.
An Lasting Powers of Attorney must also be registered with the Office of the Public Guardian before it can be used. A Health and Welfare Lasting Powers of Attorney cannot be used until the donor lacks capacity. It is also possible to include a restriction when making a Property and Financial Affairs Lasting Powers of Attorney, which similarly confirms that the document cannot be used until the individual has lost capacity. Everyone signing an Lasting Powers of Attorney to agree to act as an Attorney has to confirm that they will follow the principles of the Mental Capacity Act and Code of Practice.
It is also possible to elect to notify the individual's relatives when the Lasting Powers of Attorney is registered with the Office of the Public Guardian. This is a valuable safeguard that alerts friends and family to the fact that an Lasting Powers of Attorney has been made. Should a relative then believe abuse is taking place, they can apply to the Court of Protection to prevent the registration of the document.
However, the main safeguard remains the donor making the right choice of Attorney.
In Frank Willett's case, whilst it is not possible to comment on the circumstances surrounding Frank's choice of attorney without the full facts, an experienced solicitor would certainly have questioned his decision to appoint his neighbour as a sole attorney as opposed to his daughter and would have likely recommended the appointment of an additional attorney. Indeed, an experienced solicitor would have questioned Frank's capacity to make the document in the first place, given his recent diagnosis of dementia and his unusual decision to appoint only his neighbour.
What can be done to reduce the risk of abuse?
Solicitors for the Elderly (SFE) is an independent, national organisation of over 1,500 lawyers, such as solicitors, barristers, and chartered legal executives, who provide specialist legal advice for older and vulnerable people, their families and carers.
Solicitors for the Elderly has been campaigning to ensure essential checks and controls are conducted when making an Lasting Powers of Attorney. They have produced a helpful list of top tips which could help to ensure your Lasting Powers of Attorney is effective, legally robust and safe:
- Plan early – While you have capacity, it's vital that you get your affairs in order and choose the best people to manage your affairs, in case of an accident or illness. You can't appoint an attorney once you lose capacity.
- Choose carefully – Think carefully who you want to appoint as your attorney and have an open conversation with them so they understand your wishes and what their responsibilities will include. Consider appointing more than one person as your attorney so they can share the responsibility.
- Consider appointing a professional – A family member might not always be the best person to act as your attorney. Instead, you can appoint a professional such as a solicitor. They can act as a neutral third party and make unbiased decisions that are in your best interests. Bear in mind this usually involves a cost.
- Think about different circumstances – Consider how you would like your attorney to manage your property and financial affairs in different situations. For example, are you happy for your property to be sold to pay for your care costs?
- Address the difficult questions – Your attorney might have to make difficult decisions about your health and welfare. If you have specific wishes around your care plans, medical treatment, or end of life wishes, make sure you discuss this with them and make your choices clear in your document.
- Keep your plans current – Make sure you keep your Lasting Powers of Attorney updated if your circumstances change. Your choices around the people you want to be responsible for your finances and wellbeing may change, such as following a marriage or divorce, when children reach adulthood, or if parents pass away.
- Seek professional advice – Shop-bought and online Lasting Powers of Attorney kits may be suitable for those with very straightforward financial situations or with considerable legal experience, but for most people, seeking professional legal advice is the best way of ensuring that an Lasting Powers of Attorney is effective, legally robust and safe.
To find out more or discuss your individual requirements in further detail, our dedicated Lasting Power of Attorney solicitors will be delighted to help, our specialist team of contentious probate solicitors can also advise and support with cases involving elderly care and financial abuse of the elderly. Contact us today on 01603 693500 or email us using the 'Make an enquiry' form. Appointments available at our Norwich, North Walsham, Brooke and Sheringham offices.